Tougher days await habitual defaulters of bank loans as stakeholders in the banking industry have backed the moves by the Central Bank of Nigeria (CBN) and the Bankers’ Committee to tighten the noose on chronic debtors.
The stakeholders yesterday in Lagos, endorsed the CBN and the Bankers’ Committee’s plan to create a credit risk clause for consumer lending, which is aimed at making it difficult for habitual loan defaulters to operate.
With the clause, a lender would be able to recover its loan to a defaulter from its assets domiciled in another bank.
The stakeholders applauded the initiative, saying it would create sanity in the financial sector and enhance consumer credit.
Their support came just as the CBN warned loan seekers and owners of small-scale businesses against being duped by fraudsters who are making loan offers on the social media, purportedly from the apex bank.
Speaking at the 345th Bankers’ Committee meeting, CBN Deputy Governor, Financial System Stability, Mrs. Aisha Ahmad, said the initiative would aid economic growth.
She said the apex bank understood the banks’ reluctance to increase credit to SMEs, retail, and mortgage sectors because of customers that had either willfully or otherwise, refused to repay their loans.
"And so we have come up with a new clause that we will be including in the offer letters that we will be granting going forward," she said, adding: "It is important to also remind us of the pronouncement we made to banks that by September 30 of this year, we should have grown the loan deposit ratio to 60 per cent for those that were below and by the time we made this pronouncement the industry was at around 57 per cent."
She said if all the banks met this requirement, the apex bank would have about a trillion added to their credit balance.
Ahmad said the CBN was looking at the challenges and factors affecting the banks’ ability and willingness to lend, explaining that the new move would be a credit risk protection clause that would be in all offer letters going forward.
"Basically, it would contain the Bank Verification Number (BVN) details of the customers and the Tax Identification Number (TIN) of the customers and more or less it will be a commitment by the customers taking the loan from government. In taking the loan, you would agree that you would not default," she explained.She said the initiative was not entirely uncommon because banks already have […]